AAco joins the battle against carbon tax

The chairman of Australia’s largest listed landholder and biggest beef producer,
Donald McGauchie
, has become the latest business leader to attack the federal government’s planned carbon tax.

Mr McGauchie, a former
Telstra
chairman
who has recently taken on the same role at the
Australian Agricultural Company
, said the risk to the economy of bungling the tax was too great and Australia should wait for other countries to move.

“We struggle to understand why the government is going ahead with this," he said at AAco’s annual general meeting in Brisbane yesterday.

“For us to be out ahead of the rest of the world on this is a very dangerous place to be.

“It is a major risk for us as a company and it is a major risk if Australia gets this wrong."

Mr McGauchie’s comments represent concerns in the agricultural industry, which produces 16 per cent of emissions, that a carbon tax would put pressure on agriculture. The industry is a big user of transport and energy.

While agriculture is exempt under the carbon pricing scheme for several years, the industry is concerned about how it will be able to offset carbon emissions down the track.

Mr McGauchie’s comments followed a speech that
BHP Billiton
chairman Jacques Nasser gave at the Melbourne Mining Club this week. He said larger economies tended to try to change behaviour through regulation, rather than ­taxation.

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“In terms of a carbon tax, most countries around the world have decided to go in some other direction," Mr Nasser said.

“We’ve got to be careful we don’t get into the trap of really believing our behaviour is going to influence other countries; I don’t think that will be the case."

Backing up both chairmen’s views was director of the United Arab Emirates-based conglomerate IFFCO, Arumas Paliulis.

Mr Paliulis, who is also a director of AACo, said: “It’s not only ill-timed and ill-advised but it will have a dramatic effect on agriculture and industry in Australia."

Dubai-based IFFCO, which specialises in commodities, oils and fats, frozen foods and transport, operates in countries such as Pakistan, Tunisia, South Africa, Turkey, China and Australia.

While Mr Paliulis supported Mr McGauchie’s view, some share­holders at the AAco meeting were not convinced.

“That is a very political answer," one shareholder said to McGauchie.

“Well, it’s a highly political issue," replied Mr McGauchie, who is known for his abrasive style.

“It is an issue for all of us and one that this company has to deal with."

For AAco, which owns about 1 per cent of Australia’s land mass – about 7.2 million hectares – there is enormous potential to take advantage of carbon sequestration.

However, Mr McGauchie reminded shareholders that most of the land was on pastoral leasehold from the government, which he said further complicated the issue of abatement.

Other shareholders at the meeting, including cattle baron
Peter Hughes
, applauded Mr McGauchie’s position on the carbon tax, saying that it would push up the cost of fuel and essential farming inputs.